Various Tata companies issued clarifications to BSE, which had earlier asked the listed firms of the group to clarify the purported disclosure by the ousted chairman and his warning that some of the firms were facing a potential $18 billion writedown.Amit Mudgill | ETMarkets.com | October 27, 2016, 15:49 IST

NEW DELHI: Tata Group companies on Thursday refuted ousted Tata Sons Chairman Cyrus Mistry’s allegations of corporate governance issues and a huge potential writedown and said their financial statements are prepared on a going concerns basis and they present a true and fair view of the state of affairs of the companies.

Various Tata companies issued clarifications to BSE, which had earlier asked the listed firms of the group to clarify the purported disclosure by the ousted chairman and his warning that some of the firms were facing a potential $18 billion writedown.

The exchanges had asked Tata Motors, Tata Steel, Indian Hotels, Tata Teleservices and Tata Power, to provide full details on these issues.

Tata Steel in a statement said: “As part of the preparation of financial statements, the value-in-use of the assets of the company is tested for impairment as per accounting standards. The financial statements are considered by our audit committee and board of directors. The company, in compliance with the Sebi Listing Regulations, disseminates the quarterly financial results to the exchanges and to the wider shareholders.”

Mistry had accused the directors of the group of wrongfully dismissing him and warned that the conglomerate may face $18 billion in writedowns because of five unprofitable businesses that he inherited.

“If we look at the aggregate data between 2011 and 2015 and limit the analysis largely to the legacy hotspots (IHCL, Tata Motors, Tata Steel Europe, Tata Power Mundra and Teleservices), it will show that the capital employed in those companies has risen from Rs 1,32,000 crore to Rs 1,96,000 crore (due to operational losses, interest and capex),” Mistry had said.

“This figure is close to the net worth of the group, which is at Rs 1,74,000 crore. A realistic assessment of the fair value of these business could potentially result in a writedown over time of about Rs 1,18,000 crore,” Mistry said.

“We have perused the article on the Bloomberg website referred to by you, with comments purported to have been made by ex-chairman of Tata Sons regarding the company's Mundra Ultra Power Project. The company has always made all relevant disclosures, as required, and has no further comments to offer,” Tata Power said in a separate clarification.